It’s a well-known fact that many new businesses fail within the first five years, and many new products that hit the market never really take off. So if you’re contemplating a business or product launch, what can you do to increase your chances of success? I recommend that you take the time to really do your homework first, so you’ll have a much better feel if the idea is actually worth pursuing.
Here are three things you should do before you decide to launch:
1. Market Analysis – Once you’ve defined your idea you need to take a good look at the potential market for it. What already exists in the space? How is your idea different? What are the sales, behavioral and innovation trends in this field? Is it a growing market or a market that does not currently exist at all? How many people are in the group you plan to target? Learn everything you can about the market as a whole.
2. Customer Analysis – Next you’ll want to drill in to specifically see if people are interested in your concept. For example, say you’ve got what you think is a great idea for a new smart phone app for mothers of toddlers. Your market research shows that there are millions of moms of toddlers in the U.S., and your app would be significantly different than the apps that are currently on the market. Great! But just because the people are out there does not mean that they will actually want this app.
You need to determine if there is an actual need for your proposed product. To do this you can start by analyzing the competition and looking at any secondary data that exists about the number and type of phone apps that mothers of toddlers buy, how much they typically pay, etc. If this data does not yet exist you can contact a research provider like MacKenzie to conduct a study for you.
You can also survey a statistically meaningful sample of your target audience to gauge their interest in your proposed product. This survey can ask questions like: What do you think of this product idea? Would you pay for it? How much would you pay for it? What would make it better?
3. Name Analysis – Finally, if all else seems to be a “go,” you need to research potential product or business names. Things to consider include:
a. Availability – Is anyone else already leveraging that name? Does the name sound like any of your competitors’ names or the name of an already-popular product or company? What domain names are available around that name?
b. Perception – What do people think of this name? Does it mean anything to people? Is it descriptive or is it oblique – and how does this affect its impact? For example, should MacKenzie Corp, which really doesn’t say anything about what we do, have been named “Market Analytics, Inc.”?
c. Future – If you’re planning a full product line, does this name make sense at the high level? Will it potentially confuse people or limit your options? You wouldn’t want to name your business the Pierpoint Fish Company if you’re thinking you might eventually want to sell produce and wild game as well.
d. Negatives – Does the name mean anything negative or derogatory or otherwise undesirable in another language? The Chevy Nova car is the classic example of this, as “no va” means “it doesn’t go” in Spanish.
While we can’t guarantee success for your business, by following these steps you will at least set yourself up for success. If all of these things check out, then you can move forward with creating your business and marketing plans. If not, it’s time to go back to the drawing board!